Elpida Memory, Inc. and Powerchip Semiconductor Corp.(PSC) jointly announce that both parties will establish a new joint venture company to operate DRAM fabrication facilities in Central Taiwan Science Park with a total planned capacity of 240,000 12" wafers per month, making this site the largest concentration of 12" DRAM fabrication facilities in the world. At the same time, both parties have also agreed to jointly develop a part of next generation process technology. Through manufacturing and development collaborations, the alliance between Elpida and PSC will help combine the strengths of the Japanese and Taiwanese DRAM industries, where both parties will be in an excellent position to collectively strive for the number one position in the DRAM industry.

On December 7 in Taipei, Elpida and PSC held a Joint Venture/Development MOU Signing Ceremony, with Dr. Frank Huang Chairman of PSC and Yukio Sakamoto President and CEO of Elpida presiding over the ceremony. Both parties initially will jointly invest 40 Billion NTD to establish the new venture, where the new venture will then obtain PSC's current 12" fabrication facility in Taichung Houli Science Park, which is currently under construction. In addition to PSC investing capital PSC will also allocate human resources for a part of Elpida's next generation DRAM process technology development, thus allowing both parties to enjoy the benefits of joint development.

Dr. Huang mentioned that, despite Singapore, China, and Japan's active pursuit as well as attractive packages for such a large scale investment, Elpida still decided on Taiwan for its JV location, reflecting the importance of the strong successful relationship between Elpida and PSC. Through this type of cooperation, PSC will not only be able to rapidly expand its DRAM manufacturing scale, but at the same time will be ready to secure next generation process technology. Being able to join Elpida's development activities and share the technology, large capacity, as well excellent operation efficiencies will further cement PSC's position as a world class memory solution company.

"Now is the time for us to make our move into PC DRAM production to be the number one player in the DRAM industry," said Yukio Sakamoto. "We have decided to do so because we have gained credibility for our advanced DDR2 SDRAM backed up by the high productivity at our E300 fab in Hiroshima. Moreover, we are very confident in our 70nm process technology, soon to be in mass production in our E300 fab. We are very happy to be able to transfer this new technology to ramp up our new joint fab." Yukio Sakamoto also expressed that a combination of Elpida's state-of-the-art technology and PSC's cost competitiveness in the DRAM production will surely bring this JV outstanding production capabilities to supply high quality DRAM products at competitive prices.

Elpida and PSC's Taiwan Joint Venture in Central Taiwan Science Park will act as DRAM manufacturing base of operations, which will eventually become four 12" DRAM fabrication facilities with a combined capacity of 240,000 wafers per month. Currently the first fab under construction will have a capacity of 60,000 12" wafers per month where the clean room is now being installed. In Q2 of 2007, equipment will be installed and in Q3 mass production will begin on Elpida's 70nm process technology where the first stage capacity will reach 30,000 12" wafers per month. Basically this capacity will be split equally between the two largest shareholders. As a result of Elpida and PSC's investment of capital, technology, and human resources the newly formed joint venture will rapidly have mass production economies of scale, technology and will establish Elpida and PSC as a major players in the worldwide DRAM industry.